Paul Krugman: Illegal immigrants hurt our working poor

[standup]

New York Times / March 27, 2006
North of the Border
By Paul Krugman

... I'm instinctively, emotionally pro-immigration. But a review of serious, nonpartisan research reveals some uncomfortable facts about the economics of modern immigration, and immigration from Mexico in particular. First, the net benefits to the U.S. economy from immigration, aside from the large gains to the immigrants themselves, are small. Realistic estimates suggest that immigration since 1980 has raised the total income of native-born Americans by no more than a fraction of 1 percent.

Second, while immigration may have raised overall income slightly, many of the worst-off native-born Americans are hurt by immigration - especially immigration from Mexico. Because Mexican immigrants have much less education than the average U.S. worker, they increase the supply of less-skilled labor, driving down the wages of the worst-paid Americans. The most authoritative recent study of this effect, by George Borjas and Lawrence Katz of Harvard, estimates that U.S. high school dropouts would earn as much as 8 percent more if it weren't for Mexican immigration. That's why it's intellectually dishonest to say, as President Bush does, that immigrants do "jobs that Americans will not do." The willingness of Americans to do a job depends on how much that job pays - and the reason some jobs pay too little to attract native-born Americans is competition from poorly paid immigrants.

Finally, modern America is a welfare state, even if our social safety net has more holes in it than it should - and low-skill immigrants threaten to unravel that safety net. Basic decency requires that we provide immigrants, once they're here, with essential health care, education for their children, and more. Unfortunately, low-skill immigrants don't pay enough taxes to cover the cost of the benefits they receive.

Worse yet, immigration penalizes governments that act humanely. Immigrants are a much more serious fiscal problem in California than in Texas, which treats the poor and unlucky harshly, regardless of where they were born... Realistically, we'll need to reduce the inflow of low-skill immigrants. Mainly that means better controls on illegal immigration...

http://www.truthout.org/docs_2006/032706O.shtml

[Zenlitened]

1. This is kind of like the Bush wiretapping story:

Are we talking about Bush spying on Americans... or ILLEGALLY spying on Americans?

Are ww talking about immigration, or ILLEGAL immigration?

Krugman seems to blur the line here, and that's not at all helpful. :(

[RaleighNCDUer]

4. Americans are not losing low-end jobs to immigrants.

Illegals, who have no recourse when they are screwed by unscrupulous employers, are being hired instead of legal workers, either native born or immigrant. They are being hired precisely because they can't complain when the employer holds their wages, pays below minimum wage, extract kickbacks for the privilege of employing them, fires them without paying their final due wages.

The problem is not immigrants -- the problem is employers exploiting vulnerable illegals to line their own pockets.

[chaumont58]

7. I think you are so right

and I think that many American businessmen don't want to have to check or verify that they are employing legals. Years ago, my congressman wanted to introduce a bill requiring employers to make an honest effort to check on legality. For his troubles, DeLay's people bitch slapped him and nothing was done.
The repukes are making it an issue now because they have nothing else to run on. I think that if they are not careful, they will screw this issue just like prop 187 screwed repukes in California.

[mzmolly]

10. The problem is multi fold.

It's not an either or.

[Beelzebud]

11. IMO Both are the problem.

I used to work at a corn farm.

Monsanto bought it out.

Within one year about half of our workers were replaced with Mexican labor. Some legal, some illegal. Finally they were all that was left because they would actually take pay CUTS, and keep coming back.

Within 2 years Monsanto closed up that location, moved all the equipment to Peru, and now no one is employed there.

Monsanto made it all happen. But the illegal workers, that didn't value their time as much as the original people that worked there, helped make it happen.

When I hear that they do work that "Americans don't want to do", it literally makes my blood boil.

Thanks to NAFTA, free trade, union busting, illegal immigration, and unregulated capitalism, this once thriving small Illinois town is DEAD thanks to out-sourcing and the lowering of standards due to illegal workers.

Thanks Corporate America.

[Ms. Clio]

26. H-1B workers earn less than American counterparts, report says

The visa holders are supposed to be paid prevailing wages

News Story by Patrick Thibodeau

JANUARY 03, 2006 (COMPUTERWORLD) - WASHINGTON -- H-1B visa IT workers earn on average $13,000 less than their American counterparts, according to a study of U.S. Department of Labor records released by the Center for Immigration Studies.

H-1B workers are paid less, even though the law requires that they receive prevailing wages, according to the study by John Miano, a former chairman of the Programmers Guild, a group that has been critical of the H-1B program.

Miano’s report compares wage data that employers file with the Labor Department against U.S. wage data collected by the Bureau of Labor Statistics. While employers must attest that they will pay prevailing wages on a form called the Labor Condition Application, Miano says in the report that agency officials haven’t been required to verify that data.

Meanwhile, employers can use their own salary surveys for entry-level workers to justify paying lower wages, “rather than more relevant and objective data sources, to make prevailing wage claims when hiring H-1B workers,” wrote Miano.

The H-1B "has destroyed the entry level job market," Miano said in an interview, adding that he believes keeping the cap at its current 65,000 level will at least minimize the damage.

http://www.computerworld.com/managementtopics/outsourcing/story/0,10801,107442,00.html

[shenmue]

2. It is true, though

There are people from here who could use the jobs. Even low-skilled jobs. Anything is better than being unemployed for long stretches of time.

[brokensymmetry]

3. Good points.

Thanks for posting this.

[sendero]

5. As usual..

.... Krugman nails it.

[Cobalt Violet]

6. I can't understand why the elitist don't get this.

They won't get it.:banghead:

[mzmolly]

9. Because they are not competing for jobs with illegal immigrants perhaps?

:shrug:

[Cobalt Violet]

18. They are not competing for jobs or housing.

Housing often gets left out of the debate.

[robinlynne]

16. because they are sponsoring it

Large corporations are behind Bush's "guest worker program". They created this idea. It is a plan to increase profits. plain and simple.

[Cobalt Violet]

19. I was refering to the elitists in our own party.

You know the ones that will wonder after the election how to get more blue collar voters to vote so we can win.

[sandnsea]

28. Why do you think they don't get it?

What is it that people are hearing that I'm just not hearing. Holding businesses accountable for hiring illegals. Doubling the borders. Not allowing the Bush flood gate worker program. :shrug:

I can't understand what people think Democrats are supporting or where they're getting their information. Why own't anybody tell me.

[fujiyama]

33. I don't get it either

Since Dems aren't lining up behind that ass hole Sensebrenner's bill, Dems are supposedly catering to votes.

Fuck Sensenbrenner and Tancredo. They are both scum and I'm sick of people not understanding that Kennedy's plan is not blanket amnesty.

[rman]

35. How about: "They benefit from it"

After all, the elites are not the working poor, nor do they need a welfare state. Which is why they enable (illegal) immigration of cheap labor, break down the welfare state, lobby for tax cuts, etc etc. The elites create this situation in the first place. They "get it" alright - the like it this way.

Cheap labor, either immigrants (illegal or otherwise) or not, are just pawns in the elites power games.

[mzmolly]

8. Excellent/well reasoned/thoughtful piece.

Sums up my feelings (and the feelings of many others I'm certain) quite well.

K&R. :kick:

[warrens]

12. I don't think this is the issue

Even most immigrants know that there has to be some limit. The issue is criminalizing 12 million people and anyone who runs a food bank to help them out. No one is seriously against better control of our borders; what liberals are against is abusing people who are only trying to find work. Not to mention the expense of jailing or deporting that many people.

[mzmolly]

14. But, liberals are also against granting immunity for everyone who

hops over the border. Liberals believe in a balance.

I do think you hit a nail on the head however. It seems perhaps we are arguing about things which we agree upon? I think we're digging our heels in without looking at the issue in full?

[Critters2]

21. I haven't seen this

I have seen evidence that a good many here ARE for granting immunity to everyone who gets here in whatever way. And I've been called a racist for calling for more balance.

What "liberals" have you been talking?

[Bridget Burke]

22. The Senate Judiciary Committee has a decent plan.

It includes a route to citizenship for current "illegal" residents. What's needed? An 11 year residency requirement, payment of a fine & any back taxes, and proficiency in English. What's unbalanced about that?

www.chron.com/disp/story.mpl/editorial/hines/3755240.html

The angst in Congress contrasts sharply with largely joyous pro-immigrant demonstrations around the country, prompting political scientist Sherry Bebitch Jeffe of the University of Southern California to remark on the political effects of the debate that so many conservatives have been demanding: "It energizes the Democratic base and splits the Republican base."

May it ever be thus.

[mzmolly]

24. This is obviously not a balanced plan.

However, this may be a step in that direction:

http://www.pww.org/article/articleview/8634/1/310/

[sadiesworld]

32. Taking a look around DU I'd say the dem base is energized alright.

lol

[mzmolly]

23. The AFL-CIO came out against the immunity program. Paul Krugman

shared his concerns. The threads posted to this effect haven't gotten much attention.

Here is an article which attempts to strike a balance:

http://www.pww.org/article/articleview/8634/1/310/

[sandnsea]

29. Give me one name

One politician who is for a no strings attached amnesty. The only ones I can think of are Bush, Delay and that crew and their flood the border temporary worker program. I think people have just bought into the right wing labeling again.

[mondo joe]

15. I think you're right on what SHOULD be the issue.

Unfortunately, one thing that's going on at DU this week is a splintering about just the broader topic of illegal immigration.

[Gregorian]

13. Overpopulation is the cause. Not illegal immigration.

There, I said it. Now ignore me or flame me. But it's the truth, and most people just don't know it yet. There is no need to even explain it.

[rman]

25. Wages in Mexico being lower than in the US is the cause

I'd say that's self-explanatory.

[Dob Bole]

17. Here's a question....

according to AFL-CIO, creating a guest worker program will create a second class of workers. This is undeniably true. Now, what of that second class of workers?

Will guest workers have better legal protection (in employee disputes, etc.) if they are documented on a government list, or not?

[pat_k]

20. "immigration penalizes governments that act humanely" ???

I don't often disagree with Krugman, but I challenge his assertion that "immigration penalizes governments that act humanely."

Radically different approaches can be consistent with humane policy. As far as I'm concerned, state-by-state solutions cannot be considered "humane" or consistent with American values. Humanity requires shared burden, and on this, shared burden demands a Federal, not a state-by-state, solution.

As an economist, it is understandable that Krugman examines the issue from a cost-benefit perspective, but to find a solution that serves the common good on immigration (or anything else for that matter) we need a new perspective -- one that is grounded in some basic truths and moral principles.

I've taken a stab at outlining such an approach and would appreciate feedback on it.

Controlling our borders with the stroke of a pen

Building a wall takes time. We don't need to wait. We can effectively control immigration with the stroke of a pen by passing legislation that includes two basic elements:

• Going after predatory employers.


• Offering a path to citizenship for whistleblowers and their families.

Specifically:

• Expand the Fair Labor Standards Act (FLSA) to cover every business and individual employer, whether they employ documented or undocumented workers.
  Conditions and terms of employment must meet FLSA and safety requirements for any wage earner who meets the criteria that would require reporting under IRS rules (e.g, the IRS threshold this year is $1500 for most types of work).


• Criminalize predatory employment practices.
  Predatory employers who are violating FLSA, violating OSHA standards, and evading taxes must be subject to prosecution and mandatory prison time.


• Whistleblower immigration amnesty.
  Clear processes for workers to report predatory employers and maintain anonymity throughout the course of investigation. Whistleblowers who are undocumented (whether an individual or a group) are offered a path to citizenship.


• Increase resources and create special units as required
  Affected agencies would include the Dept of Labor Wage and Hour Division, Dept of Justice, OSHA, IRS, and INS. The Wage and Hour Division is probably the logical agency to oversee the handling of charges against predatory employers, including preliminary investigation, referral to Justice for investigation and prosecution, referral to IRS, and coordination with INS to process undocumented whistleblowers and other undocumented workers.

Controlling our borders isn't really about control; it's about values

"Controlling our borders" means more than erecting barriers or patrolling. Controlling our borders is about making a commitment to act in a manner that is consistent with our values.

When we set employment standards we are expressing our values. Those standards reflect our belief that all human beings have a right to be treated fairly.

As long as we allow ANY workers to be exploited within our borders, we disgrace ourselves. As long as we turn a blind eye to the violations committed by people who enter illegally or remain after their visa expires, we demonstrate hypocrisy.

Guest worker programs have a place, but too often; such programs have been used to give employers a ticket to pay substandard wages and subject workers to unsafe conditions. We cannot tolerate programs that set different standards for "guests."

To be consistent with American values, we need to "just say no" to the exploitation workers -- documented or not. Continuing to permit predatory employers to operate within our borders will only drive more and more of Us and "Them" into poverty.

Making implicit costs explicit

The harmful effects of supporting an underground economy are costly to the nation. When we "just say no" to the exploitation workers, some implicit costs will be made explicit. Americans have a choice. We can invest our tax dollars to our common benefit, or bear the costs -- both moral and monetary -- of exploiting other human beings.

If we choose make predatory employers the prime target, we can ensure the survival of vital "underground economy" sectors by providing transitional supports. We can offset increased costs of goods or services to the working class through tax credits. (Should be part of shifting the costs of citizenship from those who benefit the least from our common infrastructure to those who benefit the most.)

Radically changing the rules of the game

If predatory employers faced serious penalties, and the undocumented workers they are exploiting benefited from blowing the whistle, we would significantly increase the risk of exploiting workers.

The threat of exposure and prosecution alone will be sufficient for many to revamp their operations. In some sectors, the predators may simply move operations offshore. In others, predators may be forced out of business. As noted above, it may serve the public interest to provide transition assistance or start up assistance for replacement businesses.

Undoubtedly, a significant percent of undocumented workers would continue to evade detection, but employers would be far less likely to exploit them. If the workers are making a fair wage, the "race to the bottom" has a lower limit and the negative effect on wages is reduced.

We have a right enforce immigration law and deport violators

There are situations in which our interests are best served by providing an alternative to deportation. Nevertheless, if it does not serve a public interest to provide an alternative we should not hesitate to deport those who violate immigration laws.

We have a right to enforce our immigration laws. When we shift our focus to predatory employers, we are not forfeiting that right.

Offering legal status to whistleblowers serves us in two vital ways -- it deters predatory employers and it gives authorities vital resources "on the ground" who are motivated to expose those who are not deterred.

Targeting predatory employers creates a new class of unemployable undocumented workers If we do not institute a program that offers an opportunity to achieve legal (employable) status to those who are displaced, the deportation and support costs are likely to rise to intolerable levels.

If we decide that minimizing competition for jobs is worth the costs associated with deportation, the number of families who are offered legal status could be limited by entering those who qualify a "lottery" of sorts. It may seem harsh to allow chance to determine who stays and who goes, but deportation must remain the default consequence of breaking our immigration laws.

First things first

We can't begin to make progress until we impeach Bush and Cheney and purge the new American fascists from our public institutions ((Impeachment First)). Only then can we effectively engage in the messy -- but democratic -- process of dealing with this and other critical problems.

Conclusion

Our underground economy makes the United States very attractive to people who are struggling to survive in their own countries. We can change the dynamics right now and virtually eliminate the underground economy, and in the process, minimize the incentive to enter this country unlawfully.

Saying no to the exploitation of workers is central to controlling our borders. Radically changing the rules of the game makes other aspects of controlling immigration more manageable, but it does not eliminate the need for them. We still need to do a better job of tracking the foreign nationals who come here to work, study, or visit. We still need to make our border with Mexico as impenetrable as possible, while weighing the costs against the benefits.

We cannot continue to hypocritically turn a blind eye to violations of our immigration laws or tolerate the exploitation of workers within our borders. As is often the case, committing to enacting and enforcing laws that that reflect our values is not just the right thing to do, it ultimately serves the common good.

[IrishBloodEngHeart]

30. Krugman was referring to state governments relative to each other

California provides more education and other services to the undocumented than does Texas. Hence, California's humane treatment has a cost.

this cost should be a federal responsiblity, not a state responsiblity, and all should receive a uniform standard of decent care.

[pat_k]

36. Yes. I offered my thoughts on the state-level focus in my reply

. . .
Radically different approaches can be consistent with humane policy. As far as I'm concerned, state-by-state solutions cannot be considered "humane" or consistent with American values. Humanity requires shared burden, and on this, shared burden demands a Federal, not a state-by-state, solution.
. . .

[The Backlash Cometh]

27. OH, MY GOD! I've been trying to say the same thing!

I was failing miserably at expressing it, but he is so good at cutting to the chase.

[Nothing Without Hope]

31. Two other recent immigration-related threads:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=364x771487
thread title (3-28-06 GD): Immigration 101 - Get A Clue
No link in OP. GOP “Guest worker” vs Dem “earned immigration”

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=364x789515
thread title (3-29-06 GD): Thom Hartmann on the Immigration Battle.
Cheap labor for GOP cronies. “Americans will do virtually any job if they're paid a decent wage. This isn't about immigration - it's about economics. Industry and agriculture won't collapse without illegal labor, but the middle class is being crushed by it.”

[WestSeattle2]

34. I totally agree with Krugman...

The ones who are really losing in all of this, are low income, and lower middle-class wage earners. Wages are based on supply and demand. Flood a country with millions of unskilled and semi-skilled laborers and you've effectively frozen the wages of everyone else in that labor pool. Grossly unfair.

Undocumented workers are also easily manipulated, abused, and exploited. For some vile and disgusting employers, this is a dream come true.

The argument that undocumented workers are taking non-agricultural jobs that "American's don't want", is total fabrication. Pay a livable wage and employers will have applicants lined up for blocks.

Finally, flame throwers should really cease labeling anyone who disagrees with their point of view, rascists. It has nothing to do with race, and every to do with macroeconimcs.

[kurth]

37. Hard to put lipstick on this pig

Many have chosen to ignore the paragraphs quoted, but the hard facts are indisputable. Illegal immigration is harmful to our economy and harmful to the betterment of our less privileged citizens.

[lovuian]

38. Thank you Paul for explaining the ECONOMICS of the problem

They don't have Healthcare most of them and Americans are spending millions and billions meanwhile our healthcare costs go up up up...